THE European Investment Bank (EIB) says it is working on providing loans to small and medium enterprises (SMEs) in Zimbabwe while discussions on the settlement of the country’s loan arrears begin.
Speaking at a Press conference in Harare yesterday, Southern Africa and Indian Ocean head of division Diederick Zambon said the re-engagement with government follows the thawing of frosty relations between Zimbabwe and the European Union bloc.
Zimbabwe’s arrears to EIB are over $300 million which prevents the European Union from providing long term lending tothe country.
Zambon said this was the first time the EIB would be discussing with government on the arrears.
“We will meet the governor and the minister this afternoon [yesterday],” said Zambon, who is on a three day visit to Zimbabwe.
The visit ends today.
Zambon said the bank does not have the provision to write down debts, but the member states would take that position.
He said the private sector has the capacity to develop and help the country to go forward and this had motivated EIB to explore lending to the sector.
Zambon said the bank would support the small and medium enterprises in the agricultural sector especially on food security, renewable energy and climate change.
“We will provide funds to banks that interact with SMEs. We are limited in the way we interact with SMEs.We can provide money to commercial banks and it would be longterm money. We are here to explore possibilities with the private sector,” he said.
Zambon said in the past the EIB worked with Zimbabwe in 30 different operations that included power and water.
EIB has approved €1,5 billion (about $2 billion) in the past year for over 25 projects in Africa Caribbean and Pacific countries.
Zimbabwe owes various creditors that include EIB, International Monetary Fund, World Bank and others $6,1 billion according to figures from the finance ministry.